Quick warning about Venmo - they've been updating their reporting requirements almost yearly. In 2022, they were supposed to start reporting $600+ to the IRS but then it got delayed. Keep an eye on the news because this is changing all the time and the "friends and family" loophole might not work forever.

I'd also recommend your cousin start keeping detailed records now if he hasn't already - not just for this year's taxes, but for future audits. The IRS can go back 3-6 years (or longer in cases of suspected fraud), so having organized records of income and expenses is crucial. Since he's essentially running a business, he should consider opening a separate business checking account and getting a business credit card for expenses. This makes tracking so much easier and looks more professional if he ever gets audited. Plus, many business credit cards offer cash back on tools and supplies. One more thing - if he's planning to continue this handyman work, he might want to look into getting proper business insurance. If he gets injured on a job or accidentally damages someone's property, personal insurance might not cover it since it's business activity.

One thing to check - did you update your marketplace application when you got your job? Even though you cancelled the plan, you're supposed to report income changes to the marketplace separate from cancelling. If you didn't do that, it could affect how the tax credit is calculated.

I see you're dealing with a really frustrating situation, but you're definitely not alone in this! The premium tax credit reconciliation process can be confusing, especially when your circumstances change mid-year like yours did. The key thing to understand is that the IRS looks at your entire year's income to determine what credit you were actually eligible for, even though you only had marketplace coverage for part of the year. Since you went from $0 estimated income to having job income starting in May, your annual income ended up higher than what was used to calculate your advance credits. However, there's good news - you should definitely check if you qualify for repayment limitation caps on Form 8962. These caps are based on your final annual income as a percentage of the federal poverty level. If your total annual income puts you under certain thresholds (like 200%, 250%, 300%, or 400% of FPL), your repayment could be capped at much less than the full amount. Make sure you're completing Part III of Form 8962 correctly - this is where the repayment limitations are calculated. The form should automatically determine if you qualify for a cap based on your income level. You did everything right by canceling when you got employer coverage, so don't feel bad about following the rules!

This thread has been incredibly helpful! I'm in a similar situation - 100% commission real estate agent driving about 40k miles annually with zero reimbursement from my brokerage. From what I'm reading, it sounds like my classification as a W-2 vs 1099 vs statutory employee is the key factor. My brokerage treats me as an independent contractor (1099), so I should be able to deduct all my business mileage on Schedule C, correct? I've been terrible about tracking though - mostly just estimating based on my annual odometer readings. After seeing the audit story and Google Maps suggestion, I'm definitely going to start using a proper mileage app going forward and try to reconstruct this year's data using my MLS appointments and Google timeline. One question for the group: if I use the standard mileage rate, can I still deduct other car-related expenses like car washes or maintenance specifically for keeping my vehicle presentable for clients? Or is it one or the other?

This is such a valuable discussion! I'm seeing a lot of confusion about employee classification, which is totally understandable given how complex this area can be. One thing I'd add is that if you're unsure about your classification, it's worth requesting a determination from the IRS using Form SS-8. This gives you an official ruling on whether you should be treated as an employee or independent contractor, which can be crucial for cases like this where thousands of dollars in deductions are at stake. Also, for those tracking mileage going forward - don't forget that the business purpose documentation is just as important as the mileage itself. The IRS wants to see WHO you met with, WHERE, and WHY it was business-related. So "Client meeting with Smith family - showing properties on Elm Street" is much better than just "client meeting." Keep excellent records and don't be afraid to push back on your employer if you believe you're misclassified. The tax savings on 30-45k miles could be life-changing!

Anyone know if Cash App's tax documents are usually accurate? Last year I had issues with Robinhood where their 1099 had some incorrect cost basis info and it created a huge headache.

Great question about Cash App's tax document accuracy! I've been using Cash App for trading for about 2 years now and generally find their 1099-B forms to be reliable, but like Diego mentioned, it's always worth double-checking. One thing I learned the hard way - make sure to keep your own records throughout the year rather than relying solely on their year-end documents. I use a simple spreadsheet to track each trade with the date, symbol, shares, buy/sell price, and any fees. This makes it much easier to spot any discrepancies when the 1099-B arrives. Also, if you do find errors on your 1099-B, Cash App's customer support can usually provide corrected forms, but it can take a few weeks during tax season. So the earlier you review your documents, the better! The wash sale tracking seems to be where most platforms struggle, so that's definitely worth paying extra attention to if you've done any frequent trading in the same stocks.

This thread has been incredibly helpful! I'm in a similar situation with a triplex I just purchased. One thing I want to emphasize for fellow newcomers is the importance of getting this allocation right from the start, because it affects your entire depreciation schedule for decades. I made the mistake of initially treating all my closing costs as a single "acquisition expense" without splitting between land and building. My accountant had to help me correct this before filing, and it would have cost me thousands in lost depreciation deductions over the years. For anyone feeling overwhelmed by all this, don't be afraid to invest in professional help upfront. A good tax professional who specializes in real estate can save you way more money in properly structured depreciation than they cost in fees. The rules around what counts as acquisition costs vs. loan costs vs. immediately deductible expenses can be tricky, especially for first-time investors. The 50/50 split approach using tax assessment values is solid, but also consider getting an appraisal if those assessed values seem way off from what you actually paid or current market conditions. Some areas have outdated assessments that don't reflect true land vs. building values.

This has been such a comprehensive discussion! As someone who just bought my first rental property last month, I'm saving this entire thread for reference. One thing I want to add for other newcomers - don't forget about the Section 179 deduction for personal property items that come with your rental. Things like appliances, carpeting, and window treatments can often be deducted in full the first year rather than depreciated over their normal recovery periods. This can provide some immediate tax relief while you're getting used to managing the longer-term building depreciation. Also, I learned the hard way that you need to start thinking about these allocations before you even close. I wish I had asked my realtor or attorney during the purchase process to help me identify which closing costs were which. Going back through the settlement statement weeks later trying to figure out what each line item represents was much more difficult than addressing it in real time. The 50/50 split approach definitely seems like the way to go for most situations. I used my county's online property records to verify that my tax assessment breakdown was reasonable compared to similar recent sales in the area. Having that extra documentation gave me more confidence in my allocation.